DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANGKUASA RAYUAN) RAYUAN SIVIL NO. W-02 [IM] [NCVC] /2014 RAYUAN SIVIL NO. W-02 [IM] [NCVC] /2014

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1 DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANGKUASA RAYUAN) RAYUAN SIVIL NO. W-02 [IM] [NCVC] /2014 RAYUAN SIVIL NO. W-02 [IM] [NCVC] /2014 ANTARA 1. AMBER COURT MANAGEMENT CORPORATION 2. TEE SOONG HING 3. LAW NAM POH 4. LOH YOKE THYE 5. WONG CHEE KIN 6. FOO SIEW HWA PERAYU-PERAYU [menyaman dalam kapasiti sebagai Ahli Jawatankuasa Amber Court Management Corporation Management Committee] DAN 1. HONG GAN GUI 2. HUAN SOON HIAN RESPONDEN-RESPONDEN [DALAM MAHKAMAH TINGGI MALAYA DIKUALA LUMPUR (BAHAGIAN SIVIL) GUAMAN NO.23NCVC-20-04/ AMBER COURT MANAGEMENT CORPORATION 2. TEE SOONG HING 3. LAW NAM POH 4. LOH YOKE THYE 5. WONG CHEE KIN 6. FOO SIEW HWA PLAINTIF-PLAINTIF [menyaman dalam kapasiti sebagai Ahli Jawatankuasa Amber Court Management Corporation Management Committee] DAN 7. HONG GAN GUI 8. HUAN SOON HIAN DEFENDAN-DEFENDAN]

2 CORUM VARGHESE A/L GEORGE VARUGHESE IDRUS BIN HARUN BADARIAH BINTI SAHAMID GROUNDS OF JUDGMENT Brief Background [1] There are two appeals before us. Appeal /2014 is the Plaintiff s appeal against the decision of the learned Judicial Commissioner (JC) allowing the Defendant s application in Enclosure 9 to strike out the Plaintiff s Writ and Statement of Claim dated , pursuant to Order 18 Rule 19 (1) (a) or (b) or (c) or (d) of the Rules of Court Appeal /2014 is the Plaintiff s appeal against the decision of the same learned JC dismissing the Plaintiff s application in Enclosure 14 to amend their Writ and Statement of Claim. The amendment was in respect of the intitulement to state that the action was being brought by the 2 nd to the 6 th Plaintiffs in their personal capacity as well as their capacity as Council members of Amber Court management corporation

3 [2] The Plaintiffs had filed an action in defamation against the Defendants in respect of alleged defamatory statements about the Plaintiffs posted in a facebook account belonging to the Defendants. [3] The 1 st Plaintiff is the management corporation of Amber Court Condominium. The 2 nd to the 6 th Plaintiffs were Council members of the 1 st Plaintiff at the time of the publication of the alleged defamatory statements. [4] The primary issue before the high court was whether the Plaintiffs have locus to commence an action in defamation. [5] The learned JC determined that the Plaintiffs had no locus to institute the suit on the grounds succinctly summarised as follows: A management corporation as a creature of statute, cannot of its own volition extend its jurisdiction to matters falling outside its own competence. Its powers and duties are defined and limited by the Act. A claim in defamation cannot be brought by the management corporation as it is neither a trading nor a nontrading corporation. Appellants Grounds of Appeal [6] In the Appellants Memorandum of Appeal, the following main grounds were raised: [7] The learned JC had erred in law in her interpretation of the Strata Titles Act 1985 (Act 318) ( the Act ) in respect of the powers and 3

4 competence of the 1 st Plaintiff ( management corporation ) to institute actions in defamation in particular, sections 39, 43 and 47of the Act. [8] The learned JC had misdirected herself in her reference to the case of Chinese Empire Reform Association v Chinese Daily Newspaper Publishing Co. Ltd. [1970] XIII BCR 141, in relation to the distinction between trading and non-trading corporations. [9] The learned JC failed to appreciate that the Act does not require the management corporation to obtain a resolution before instituting or defending suits. [10] The learned JC had failed to consider that the 2 nd to the 6 th Plaintiffs who were Council members of the management corporation had the capacity to bring an action in defamation in their individual capacities. Appellants submissions [11] The crux of the Appellant s submissions before us is that the Act should be read in a liberal rather than a restrictive way to give the Plaintiffs locus to sue and be sued on all matters, including defamation. [12] In support of the above contention, the Appellant refers to section 39(3) of the Act which states a general provision that, The management corporation may sue and be sued. [13] In addition the Appellant sought to place emphasis on the word include found in Section 43(a) of the Act to submit that the duties stated in 4

5 that provision were not meant to be exhaustive but could be extended to other incidental powers and duties as well. [14] In support of the above contention, reference was made to the case of Tenaga Nasional Bhd v Tekali Prospecting Sdn Bhd [2002] 2 MLJ 707 at 714 where Gopal Sri Ram JCA (as he then was) observed that: On settled principles of statutory interpretation, it is clear that when an Act of Parliament employs the expression, includes to define some other word or expression, the intention is to leave the meaning of the expression defined open ended. By contrast, when the word means is employed to define something, there is a rebuttable presumption of statutory interpretation that Parliament intends to restrict the meaning of the expression defined. [15] Reference was also made to the Building and Common Property (Maintenance and Management) Act 2007 (Act 663) which provides under the heading, Duties and powers of Joint Management Body, the following: Section 8(2): The powers of the Body shall include the following: (g) to do all things reasonably necessary for the performance of its duties under this Act. [16] The Appellant cites as authority for a liberal as opposed to a restrictive interpretation of the competence of the management corporation, the case of Badan Pengurusan Tiara Duta v Timeout Resources Sdn Bhd [2015] 1 MLJ 110.In that case the main issue that arose for determination was whether a condominium complex s joint 5

6 management body ( JMB ), established under the Building and Common Property (Maintenance and Management) Act 2007 (Act 663)had power under the Act to lease out the common property to a third party. [17] The Court of Appeal held as follows: The absence of a specific provision spelling out expressly the power to sell, lease or rent out common property in s. 8(2) of the Act did not necessarily mean a JMB did not have the power to do so. The power need not be express and it could be implied that the leasing out of common property by a JMB can come within the ambit of s 8(2) g of the Act As there was a general provision in s 8(2)g ( to do all things reasonably necessary for the performance of its duties under the Act ) the court saw no reason or basis to declare the agreement to lease in the present case to be null and void for being ultra vires the Act. Thus, the Appellant contends that the Plaintiff has the locus to commence an action in defamation against the Defendants. [18] It was further contended that the 2 nd to the 6 th Plaintiffs as Council members of the management corporation have locus to institute this action against the Defendants. In support reference was made to the case of Knupffer v London Express Newspaper [1944] AC 116 as authority for the proposition that if defamatory statements are made of a class or group, every member of it has a cause of action. Issues [19] The issues before us may be summarised as follows: 6

7 1. Whether the 1 st Appellant/Plaintiff, Amber Court Management Corporation ( the management corporation ) has locus to institute an action in defamation under the Strata Title Act, 1985C (Act 318)? 2. Whether the 2 nd to the 6 th Appellants/Plaintiffs who were at the material time Council members of the management corporation have the locus to institute an action in defamation under Act 318 or by recourse to common law? DECISION [20] After careful consideration of learned counsels oral and written submissions, the Record of Appeal as well as relevant authorities, we find no merits in this appeal. We therefore dismiss both appeals with costs. The decision of the high court to strike out the Plaintiffs suit in appeal /2014 is affirmed. We also affirm the decision of the learned JC to dismiss the Plaintiffs application for amendment of their Writ and Statement of Claim in appeal /2014. The grounds of our decision are set out below. Strata Titles Act 1985 (Act 318) Duties and Powers of the management corporation [21] In order to determine whether the 1 st Plaintiff, Amber Court management corporation ( the management corporation ) and the 2 nd to the 6 th Plaintiffs who are Council members of the 1 st Plaintiff, have locus to institute an action in defamation, it is necessary, firstly to examine the 7

8 nature of the management corporation and the Council, and its powers and competence conferred by the Act. [22] According to section 39(1), a management corporation consists of all the parcel proprietors including in the case of phased development, the proprietor of the provisional block or blocks. [23] By section 39(4) The management corporation shall elect a council which, subject to any restriction imposed or direction given by the management corporation at a general meeting, shall perform the management corporation s duties and conduct the management corporation s business on its behalf, and may for that purpose exercise any of the management corporation s powers. [24] The Act therefore conceives of the management corporation and the Council as two separate entities. While the management corporation is comprised of all parcel proprietors, the members of the Council comprise only those parcel proprietors who have been elected by the management corporation to perform the duties and conduct the business of the management corporation. [25] What are the powers and competence of the management corporation? By virtue of section 39(3), the management corporation may sue and be sued. [26] Section 43(1) of the Act further lists the specific duties and powers of management corporations. These relate principally to the proper management and maintenance of the common property. 8

9 [27] Section 43(2) confers on the management corporation specific powers in respect of the common property. Paragraph (f) confers the power to do all things necessary for the performance of its duties under this Part [28] Further, there are express provisions in the Act which stipulate the nature of the legal proceedings which management corporations are empowered to institute. These are as follows: 1. By virtue of section 53, in respect of legal proceedings to recover sums due from a proprietor; 2. By virtue of section 76, as representatives of proprietors in respect of legal proceedings which relate to common property; 3. By virtue of section 77, proceedings taken as agents for proprietors in cases of defects to parcels in the common property. [29] It is quite clear from a careful reading of the Act that the intention of the Legislature in creating the management corporation is for the purposes of the proper management and maintenance of the common property of parcel proprietors, which includes the power to institute legal proceedings in respect thereof, as expressly stated in sections 53, 76 and 77 of the Act. [30] In the face of the clear, express provisions stipulating the powers and competence of the management corporation, it is not tenable that the general provisions of sections 39(3) and section 43 (2)(f) of the Act should 9

10 extend such powers indeterminately to the extent that it would include the power to bring an action in defamation. [31] We find support for the above proposition in the Singapore case of RSP Architects Planners & Engineers v Ocean Front Pte Ltd and another appeal [1996] 1 SLR 113.The primary issue before the Singapore Court of Appeal was whether it is competent for the management corporation of the Bayshore Park Condominium to sue in its own name for the alleged defects in the construction of the common property. [32] The court analysed the relevant provisions of the Singapore Land Titles (Strata) Act, 1988 which has provisions similar to the Malaysian Strata Titles Act, 1985 (Act 318) in respect of the powers of the management corporation. The court took the approach that the powers and competence of the management corporation is to be construed by reference to the express and specific provisions of the Act, not by implication from general provisions. [33] In the RSP Architects Planners case (supra) the court found that the management corporation could institute the action under section 32(2) (b) or (c) or section 116 of the Strata Act. [34] Section 32(2) of the Strata Act provides as follows: The management corporation may- (a) (b) sue and be sued on any contract made by it; sue and be sued in respect of any matter affecting common property; 10

11 (c) sue in respect of any loss or damage suffered by a management corporation arising out of a contract or otherwise; and (d) be sued in respect of any matter connected with the parcel for which the subsidiary proprietors are jointly liable. [35] LP Thean JA had observed, at p. 120: The claim of the management corporation is against the developers for damages representing the costs and expenses incurred or which would be incurred in rectifying the defects to the common property occasioned by the alleged negligence of the developers. It is empowered by s. 33(2) of the Strata Titles Act to bring and maintain this action and the claims falls within para (b) as well as para (c) of s 33(2). In our judgment, the management corporation is competent to bring the action under s 33(2) of the Strata Act. Alternatively, the management corporation is entitled to bring the action on behalf of the subsidiary proprietors under s116 of the Strata Act. [36] A similar interpretation was adopted by this court in the case of Badan Pengurusan Tiara Duta v Timeout Resources Sdn Bhd [2015] 1 MLJ 110. In that case the main issue that arose for determination was whether a condominium complex s joint management body ( JMB ), incorporated under the Building and Common Property (Maintenance and Management) Act 2007 (Act 663) had power under the Act to lease out the common property to a third party. 11

12 [37] In that case the Court of Appeal made a finding that such power to lease arises by necessary implication from the express provisions of s 8(2) (d) of the Act. Mah Weng Kwai, JCA had observed: If, as is provided in s 8(2)(d), a JMB can purchase, hire or acquire property, the court sees no reason why a JMB cannot do the converse provided of course, the sole objective is for the benefit of residents and members of JMB. [38] Thus, in principle the construction of the legal capacity of a Joint Management Body (JMB) under the Building and Common Property (Maintenance and Management) Act 2007 (Act 663) in the case of Badan Pengurusan Tiara Duta (supra) was no different from the approach of the Singapore court in the case of RSP Architects Planners case (supra). The powers and competence of an entity like the management corporation has to be determined by reference to express provisions of the enabling statute. [39] Thus in the absence of express provisions or by necessary implication from express provisions, the 1 st Plaintiff/management corporation has no locus to bring an action in defamation against the Defendants. [40] In respect of appeal /2014, the 2 nd to 6 th Plaintiffs proposed amendment to the intitulement to the action was to state that they are suing in their personal capacity and as Council members of Amber Court Management Corporation. In respect of the locus of the 2 nd to the 6 th 12

13 Plaintiffs, a careful consideration of the Act demonstrates that the Act does not empower the Council members of the management corporation with the legal capacity to institute actions in their own individual names or as Council members of the management corporation. [41] Since the Council only acts on behalf of the management corporation and its powers are restricted to any of the powers of the management corporation, the 2 nd to 6 th Plaintiffs have no locus to sue in defamation. [42] In any event if one were to examine the Statement of Claim at paragraph 29 (the so termed First Attack ) and paragraph 31 (the so termed Second Attack ) that set out the purported defamatory material, it will be noticed that none of the 2 nd to 6 th Plaintiffs are specifically mentioned or identified by the Defendants in the impugned Facebook or material; all references were to the management corporation as a whole or its proceedings. [43] At paragraph 33 of the Statement of Claim (the so termed third Attack ) only the names of the 2 nd and 3 rd Plaintiffs are found in the alleged Facebook material. At paragraph 34 however it is averred that the Plaintiffs contend and will contend that the statement was issued with the intent to defame the Plaintiffs meaning all the Plaintiffs collectively as `Ahli Jawatan Kuasa Amber Court Management Corporation Management Committee. In our view if the 2 nd and 3 rd Plaintiffs were complaining that they had been defamed personally, then they ought to have rightfully brought separate proceedings in their individual capacities (apart from others) and not have 13

14 it rolled up as being defamatory of the management corporation and all of the Plaintiffs. Common law [44] The next issue to consider is whether, in the absence of competency to institute an action in defamation under the Act, the Plaintiffs can have any similar recourse under common law? [45] The 1 st Plaintiff is not a natural person but a creature of statute. Thus, their powers and competencies must necessarily be conferred by the enabling statute. In any event, the Appellants have not been able to furnish us with any authorities to support the contention that the Plaintiffs have the locus to maintain an action in defamation at common law. [46] Historically at common law, the tort of defamation had developed to protect the individual s dignity and social esteem. When the claimant is a legal (i.e. artificial) as opposed to a human entity, different principles apply. [47] As Lord Reid observed in the case of Lewis v Daily Telegraph [1964] AC 234 at 262: A company cannot be injured in its feelings; it can only be injured in its pocket. Its reputation can be injured by a libel but that injury must sound in money. The injury need not necessarily be confined to loss of income. Its goodwill may be injured. 14

15 Trading and Non Trading corporations [48] At common law, the position is that a trading corporation and nontrading corporation can sue for defamation on proof that the defamatory statements affect its business, revenue or income or goodwill. [49] In the classic case of South Hetton Coal Co v North Eastern News Association Ltd [1894]1 QB 133, the Court of Appeal held that a company was entitled to sue a newspaper which had alleged that properties in which the company had housed its employees were highly insanitary. It was held that the company could maintain the action in libel as there was injury to the company s trading reputation. [50] Recently, the House of Lords approved the position in South Hetton s case (supra) in the case of Jameel v Wall Street Journal Europe SPRL (No. 3) [2007] 1 A.C In this case, a trading company, incorporated in Saudi Arabia, had brought an action for libel in response to a newspaper article which suggested that its bank accounts were being monitored for channelling funds to terrorist organisations. The company was found to have a trading reputation in U.K. and thus could maintain an action in libel. [51] In the case of Chinese Empire Reform Association v Chinese Daily Newspaper Publishing Co. Ltd. [1970] XIII BCR 141, the Court held that non-trading and trading corporations can maintain actions in defamation provided that there was injury to its property or business. In this case the Plaintiff, a non-trading corporation was incorporated under the Benevolent Societies Act with express powers to transact business, 15

16 acquire and purchase property as well as sell, exchange, mortgage let or otherwise dispose of property, real and personal. Morrison J observed: a non-trading corporation has the right to acquire property which may be the source of income or revenue. And the transaction of the business incidental thereto creates a reputation, rights and interests, in no essential respects different from that of an individual or trading corporation. [52] The Chinese Empire case (supra) may be distinguished from the instant case on its particular facts. In contrast, the Plaintiffs in the instant case are not empowered to transact business or to acquire and deal with property to acquire revenue or income. Its powers are primarily for the maintenance and enjoyment of common property by parcel proprietors. [53] Thus in common law, the Plaintiffs have not met the criteria to enable them to maintain an action in defamation. Conclusion [54] It is clear from the established authorities that the 1 st Plaintiff, as well as the 2 nd to 6 th Plaintiffs being creatures of statute can only exercise powers and competence expressly provided in the enabling statute or by necessary implication arising from express provisions in the Act itself. To extend these powers and competence by reference to general provisions in the Act, to confer locus to bring an action in defamation, is to our mind to go further than what was intended by the Act and is unsupported by authorities. 16

17 [55] Neither can there be recourse to the common law for the reasons discussed above. [56] We therefore dismiss both appeals with costs, and affirm the decision of the learned JC to strike out the Plaintiffs Writ and Statement of Claim dated , pursuant to Order 18 Rule 19 1(a) or (b) or (c) or (d) of the Rules of Court 2012, as well as the Plaintiffs application for amendment of the same. Sgd DATUK Dr. BADARIAH Sahamid, Judge Court of Appeal Dated: 27 th November 2015 For the Appellant : Avinder Singh Gill A/L Ranjit Singh Tetuan A.S. Gill & Salina Peguambela & Peguamcara No , 2 nd Floor 4 ½ Mile Jalan Ipoh Kuala Lumpur For the Respondent: David A/L Samuel Leonard Parthiban A/L Lourdesamy Tetuan Chambers of Firdaus Peguambela & Peguamcara J-5-1, 5 th Floor, Parklane Commercial Hub Jalan SS7/26, Kelana Jaya Petaling Jaya, Selangor 17